i don't know of any solutions that will capture and encode video directly on the device.
one option is to use apple av cables and record the output with video capture hardware. for this to work, you'd need to either support video out capability in your app directly or jailbreak and use one of the background screen streaming utilities.
some of the newer stuff like airplay video and screen mirroring might make this easier as well, but I haven't seen it working myself.
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